Unpaid Overtime Claims: Common Pitfalls for California Employers to Avoid

Unpaid overtime claims can be a significant concern for California employers. Failing to comply with state and federal wage and hour laws can result in costly litigation, penalties, and damage to a company’s reputation. To help employers navigate this complex area of employment law, we have compiled a list of common pitfalls to avoid. By implementing these tangible tips, employers can minimize their risk of unpaid overtime claims and ensure compliance with the law.

Misclassifying Employees as Exempt: A Costly Mistake

Misclassifying employees as exempt from overtime pay is a joint pitfall employers must avoid. California law has strict criteria for exempt status, including meeting specific salary and job duty requirements. Failure to correctly classify employees can lead to significant liability for unpaid overtime wages. Employers should regularly review job descriptions, salary levels, and exempt status requirements to ensure compliance.

Off-the-Clock Work: The Danger of Unrecorded Hours

Employers must be vigilant in ensuring that all hours worked by employees are accurately recorded and compensated. Off-the-clock work, such as answering emails or performing tasks outside regular working hours, can easily lead to unpaid overtime claims. Implementing clear policies that require employees to record all hours worked, providing training on proper timekeeping, and monitoring compliance can help avoid potential disputes.

Failure to Include All Compensation in Overtime Calculations

Calculating overtime pay based solely on an employee’s base salary is another common pitfall. California law requires employers to include various forms of compensation, such as bonuses, commissions, and specific benefits when calculating overtime rates. Failing to include these additional earnings can result in underpaying overtime wages and potential legal consequences. Employers should ensure they understand the specific requirements for calculating overtime pay and include all applicable compensation in their calculations.

Unauthorized Overtime: The Importance of Obtaining Prior Approval

Allowing employees to work overtime without prior approval can lead to disputes over unpaid wages. Employers should establish clear policies regarding overtime work and require employees to obtain approval before working additional hours. Regularly communicating and consistently enforcing these policies can help prevent unauthorized overtime and subsequent claims for unpaid wages.

Failure to Provide Adequate Meal and Rest Breaks

California law mandates that employees receive certain meal and rest breaks based on the hours worked. Failure to provide these breaks or ensure employees take them can result in unpaid overtime claims. Employers should establish and enforce policies that allow employees to take their required breaks, maintain accurate records of break times, and provide a supportive work environment that encourages employees to take their breaks as required by law.

At Kaplan Weiss LLP, we understand unpaid overtime claims’ complexities and potential pitfalls. Our experienced employment law attorneys in Los Angeles, CA, can provide guidance and representation to help employers navigate this challenging area of law.

Contact Kaplan Weiss LLP today if you need assistance with unpaid overtime claims or other employment law matters!